2012 National Budget

The Philippine government’s proposed budget to the Congress for fiscal year 2012 is P1.816 trillion. The P1.816-trillion is said to be a results-focused budget. These “results”, foremost of which is the “commitment to lift the poor from poverty through honest and effective governance”, are contained in the Social Contract with the Filipino People and will be operationalized through the Philippine Development Plan, 2011-2016.

On May 13, 2011, Executive Order (EO) No. 43 was issued to reorganize the Aquino government’s Cabinet into five clusters in line with the five areas of priority of the Social Contract: These include: 1.) transparent, accountable and participatory governance; 2.) Poverty reduction and empowerment of the poor and vulnerable; 3.) Rapid, inclusive and sustained economic growth: 4.) Just and lasting peace and the rule of law; and 5.) Integrity of the environment and climate change adaptation and mitigation.
Based on these priority areas, the proposed budget for 2012 was prepared.

By sector

For 2012, social services will receive 31.7 percent of the national budget, which is almost one-third of the proposed amount. It has the same share as last year but is equivalent to P575.8 billion, compared to P521.4 billion this year. The sector’s share is higher than this year’s budget by 10.4 percent. Under this sector is the Pantawid Pamilyang Pilipino Program (4Ps), the cornerstone of the Aquino government’s poverty reduction agenda. The 4Ps, which includes the conditional cash transfer (CCT) is set to benefit three million households by January next year compared to 2.3 million households this year.

The social services sector is followed by economic services, with P438.9 billion or an increase of 22.0 percent. The government has address critical constraint to growth such as macroeconomic and fiscal instability. The goal is to narrow the fiscal deficit to P286.0 billion or 2.6 percent of gross domestic product (GDP), from this year’s target of P300.0 billion or 3.0 percent of GDP. Thus it is imperative to focus spending on infrastructure, agricultural and industrial support services, and vocational and tertiary education curricula.

Debt service interest payment, which is the sum of loan repayments, interest payment commitment fees and other charges on foreign and domestic borrowings, comes at P333.1 billion (18.3%); general public services, P332.1 billion (18.3 percent); and defense, P113.1 billion (6.2 percent). As a share of the budget, the debt burden is three percentage points lower than this year.

By expense class

Expenses are made of capital outlays, current operating expenses, maintenance and other operating expenses, and personal services, among workers.

Capital outlays

Refers to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the government, including investments in the capital stock of Government Owned and Controlled Corporations (GOCC) and their subsidiaries. Capital outlays will be provided some P328.6 billion, 25.4 percent higher for 2012 than 2011’s P262.0 billion. Of the said amount, 77.7 percent or P255.2 billion is for infrastructure and other capital outlays. The allocation for infrastructure and capital outlays will increase by 33.1 percent from its current level of P191.7 billion. The infrastructure program amounts to P182.2 billion, 25.6 percent higher than 2011’s. It represents 1.6 percent of GDP, higher compared to 2011’s 1.4 percent.

Current operating expenditures refer to the amount budgeted for the purchase of goods and services for the conduct of normal government operations within a budget year. They include goods and services that will be used or consumed during the budget year. For 2012, current operating expenditures will get P1.464 trillion, 7 percent higher than 2011’s allocation of P1.368 trillion. Of which, P268.1 billion will be set aside for maintenance and other operating expenditures (MOOE); while P593.3 billion will be for personal services.

By recipient entity

Allocations to Local Government Units are set to receive P291.6 billion. Of the said amount, internal revenue allotment amounts to P273.3 billion. Allocation to GOCCs will amount to P20.2 billion, an increase of 87.8 percent, from P10.8 billion in 2011 to provide larger support for the rice self-sufficiency related undertakings, for electrification and for housing.

P8.0 billion to the Commission on Election (COMELEC) for automated elections to ensure clean and honest midterm elections, inclusive of P162.3 million for its unfilled positions; and P123 million to support activities for the Resumption of the System of Continuing Registration.

P3.6 billion to DENR to support the DENR’s Cadastral Survey Project with a target of 2.1 million hectares of land through the use of advanced mapping technology

Poverty reduction and empowerment of the poor and vulnerable

Providing a lifeline to the poor

P39.5 billion for the Pantawid Pamilyang Pilipino Program (4Ps) to expand beneficiaries to 3 million indigent households from 2.3 million in 2011

P1.2 billion for Social Pension for Indigent Senior Filipino Citizens to benefit 198,370 indigent senior citizens aged 75 years and above who will be given P500 each monthly as social pension. The proposed amount is 38 perccent higher than the 2011 level of P871 million which covers 138,960 beneficiaries

P2.9 billion for the DSWD’s Supplemental Feeding Program to help provide nutritious meals to 1.6 million children enrolled in daycare centers

Building capacities through education

P1.9 billion for the universal kindergarten program to benefit some 2.3 million five‐year old children in pre‐school

Provisions to address gaps in basic education

2.9 billion for the creation of 13,000 teacher positions (exclusive of P8.9 billion lodged under the MPBF for unfilled teaching positions)

P18.4 billion for basic educational facilities: construction and rehabilitation of 45,231 classrooms, purchase of 2.53 million desks and chairs, and construction of 25,667 water and sanitation facilities

P2.6 billion for the procurement of 45.5 million textbooks and manuals

Provisions for scholarships

P6.3 billion under DepEd’s Government Assistance to Students and Teachers in Private Education (GASTPE). The proposed amount is bigger by P456 million from this year’s budget of P5.8 billion to expand number of beneficiaries to 1 million grantees from 757,401 in 2011. The GASTPE does not only provide scholarship opportunities to deserving students but it also helps decongest public schools.

P2.1 billion to benefit scholars in science‐related education. Of the said amount P1.3 billion will go to the Department of Science and Technology (DOST)’s Science Education Institute to support more than 10,000 scholars at the undergraduate and graduate levels. The remaining amount will be for the Philippine Science High School to support 4,334 scholars in 2012.

P681 million to finance Commission on Higher Education’s Student Financial Assistance Programs (STUFAPs) which covers some 47,330 grantees. All slots allotted for STUFAPs are for priority courses that are in demand in the labor market

P700 million for the 30,000 slots that will be offered by TESDA under its training‐for‐work scholarship program. To help ensure employability of graduates under the program, training courses will be based on key employment generators identified by Department of Labor and Employment (DOLE)

Support for higher education

P25.8 billion for 110 SUCs to support quality tertiary education

PP500 million has been allotted under CHED to make sure that the curricula of SUCs are focused on the priority areas for economic development (business process outsourcing, tourism, agriculture and fisheries, and infrastructure development)

Advancing public health

P49.9 billion are allotted for the health sector. Around 89 percent or P44.4 billion of this will go to DOH for undertakings intended to achieve the MDGs on health

P5.1 billion will be used for the Health Facilities Enhancement Program, to upgrade healthcare facilities, particularly for maternal healthcare

P1.9 billion for the Expanded Program on Immunization to help reduce infant mortality and morbidity, to target 2.6 million children, aged 0‐15 months

P2.5 billion to support the implementation of family health and responsible parenting, which includes the vaccination of 1.2 million senior citizens against influenza and pneumonia. Funding for this program increased by as much as 242 percent, from its 2011 level of P731 million

P1.7 billion to sustain the Doctor to the Barrios program of the DOH. The funds will be used to deploy 200 doctors, 1,021 midwives, and 12,000 nurses in regional health units, barangay health stations, and hospitals

P12.0 billion to fund payments for premium subsidies under the National Health Insurance Program. The amount has been increased by P8.5 billion from P3.5 billion in 2011 to cover all 5.2 million indigent households identified in the National Household Targeting System (NHTS)

Affordable housing

P5.6 billion for resettlement of families residing along danger areas and families affected by calamities, and slum upgrading. Of which, P500 million is in response to the clamor of CSOs for additional resettlement projects

P500 million under the National Home Mortgage Finance Corporation to finance its Community Mortgage Program. The Program, which aims to help organize community home associations of landless citizens obtain tenure and ownership of the land they are presently occupying, is expected to assist 25,000 beneficiary members next year, higher than the 20,000 beneficiaries this year

P22.1 billion, broken down into P3.0 billion for DPWH, P2.5 billion for DA, P8.6 billion for DOTC, P3 billion for DOH and P5 billion for DepEd

National productivity improvement

P2.7 billion in the budget of the DOST for the generation of new knowledge and technologies, their diffusion and transfer, and development of S&T human resources for S&T

Included above is P392 million for the adoption of new technologies to assist small and medium scale enterprises, 30.6 percent more than this year’s allocation

Food self‐sufficiency

P24.8 billion for the construction and rehabilitation of irrigation systems that will service a total of 214,055 hectares that will benefit 142,767 households, an increase from this year’s 112,349 households

Agri Pinoy Banner Programs --- National Rice Program (P6.2 billion); National Corn Program (P951 million); High-Value Crops Program (P1.3 billion); National Fisheries Program (P1.9 billion); and National Livestock Program (P1.0 billion)

P50 million from the 2012 budget of the DOLE for the reintegration of OFWs through livelihood programs and local wage employment

P30 million out of the Department of Foreign Affairs as Legal Assistance Fund to pay for legal services for distressed migrant workers and overseas Filipinos. This will also ensure that the Legal Assistance Fund still remains at P100 million in the coming year as mandated by law.

P100 million for the Government Peace Negotiating Panels to pursue a final negotiated settlement of all armed conflicts with the Moro Islamic Front and Communist Party of the Philippines-National People’s Army-National Democratic Front (CPP‐NPA‐NDF )

Protecting national territory and boundaries

P107.8 billion to DND, P5 billion of which for AFP Modernization Program

P78.6 billion to Philippine National Police, of which P57.7 billion will be used to enhance PNP capabilities in crime prevention and suppression services

P4.9 billion for the implementation of the Jail Management and Penology Program of the Bureau of Jail Management and Penitentiary that will improve jail security, upgrade the living conditions of and intensify development programs for inmates

P12.5 million for the investigation of violators of trade competition laws for the Department of Justice; P9.7 billion for various programs that will fast‐track the passing of final resolutions; P174.7 million to Witness Protection Services; P50 million to intensify government efforts against human trafficking; P5 million for the creation of the Office of Cybercrimes; and P400 million for the construction of a 12‐storey Manila City Hall of Justice

Instituting an efficient and impartial justice system

P168 million for the salary differentials of 1,465 judges to raise their salaries according to the SSL III

P2 billion under MPBF for filling up vacant positions in the Judiciary

P15.7 billion to the Judiciary, an increase from its P14.3 billion in 2011, to boost its Enhanced Justice on Wheels Program of the Supreme Court

Integrity of the Environment and Climate Change Mitigation and Adaptation

Preparedness

P7.5 billion for the Calamity Fund (50% higher than P5.0 billion for 2011)

P367 million for PAGASA automation (100.5% increase from 2011)

P12.3 billion under the budget of DPWH for flood control projects (to construct 8,000 lineal meters of flood barriers)

P485 million for the Laguna de Bay Institutional Strengthening and Community Participation Project covering 20 LGUs

P173 million for the Pasig River Rehabilitation project

P793 million for Solid Waste and Disposal Management Project of the Metro Manila Development Authority to provide disposal service for 17 LGUs in Metro Manila as well as technical assistance to other LGUs.

Sustainability

P2.7 billion under the DENR budget for the planting of seedlings to 214,900 hectares of land in line with the National Greening Program (NGP) of the DENR to plant 1.5 billion seedlings by 2016. Also included under NGP are P761 million under DA’s budget to produce 36 million fruit tree seedlings, P9 million for DepEd to produce 20 million planting bags and 200 information, education and communication (IEC) materials

P857 million for the Forest Protection Program to hire 600 extension workers and 3,113 Bantay Gubat volunteers to monitor and patrol the 4.1 million hectares of untenured forest lands

P711.0 million for the Philippine Energy and Efficiency Program of the Department of Energy to retrofit 120 government buildings with energy‐efficient lighting and to install LED traffic lamps in 88 traffic intersections.